3 Buy NIFTY ideas that could get up to 12%
The Indian equity market continued to trade sideways during the week gone by in the backdrop of May series expiry and several other domestic and global developments.
The Nifty marginally gained momentum after it breached the crucial level of 10,600 on the downside last week, but managed to touch a high of 10,764 on the weekly chart. Despite a positive momentum, it has failed to hold this level on Friday as it closed at 10,696, a gain of about 0.86 percent on a weekly basis.
After forming a bullish candlestick pattern on the Thursday’s price chart, the Nifty formed a bearish pattern on Friday, although no major formation was seen on a weekly basis. Its weekly relative strength index (RSI) stood at 58, indicating no price divergence, while moving average convergence divergence (MACD) indicated bullishness as it continued to trade.
The market is likely to trade sideways ahead of the Monetary Policy Committee’s meet this week and take direction from the outcome. Any weak global sentiment is also likely to weigh on the market as witnessed in the past few sessions last week.
Hence, we advise investors to be stock-specific, applying a strict stop-loss on a trailing basis. We expect the Nifty to remain rangebound on a weekly basis, with the upside and downside capped at 10,790 and 10,570 levels, respectively.
Bodal Chemical witnessed a sharp correction in the last six-month from Rs 172 levels towards Rs 114-111 zone where it formed two consecutive bottom trend-channel which indicated a strong support.
Recently, it witnessed a strong upward momentum where it made two higher peaks after breaching its 20-days EMA level placed at Rs 135 levels.
Substantially, the scrip also witnessed a strong volume growth on the weekly basis and formed a bullish candlestick pattern on the weekly price chart with about 13 percent gain in same period despite closing lower on Friday.
The weekly RSI level up at 55 coupled with positive divergence on MACD which indicates a buying regime at the current level.
The scrip has a support placed at Rs 114 levels and resistance level at Rs 172. We have a buy recommendation for Bodal Chemicals which is currently trading at Rs. 143.60
KPIT Technologies Ltd: Buy | Target: Rs 303 | Stop-loss: Rs 273 | Return 6%
KPIT Technologies continued to trade on positive trajectory throughout the week despite a weak market breath and managed to breakout from crucial moving average level placed at 267.
Although the stock witnessed a minor correction to trade below Rs 247 levels but made a strong rebound to make the fresh higher peak. The scrip also witnessed a sharp volume buildup indicating a sustained trend.
The scrip formed a solid bullish candlestick pattern on its weekly price chart indicating upward momentum. Further, a secondary momentum indicator witnessed a revival with weekly RSI level continuing in buying zone coupled with a positive cue on MACD.
The support level for scrip is currently placed at 262 and resistance level at Rs 315. We have a Buy recommendation for KPIT Technologies which is currently trading at Rs 285.75
Rain Industries Sell | Target: Rs 213 | Stop-loss: Rs 243 | Return 4%
Rain Industries continued to remain under pressure over a month although it marginally gained upward momentum but failed to carry forward slipped below its crucial support level at the lower bottom.
The scrip broke below an important moving average level of 50-days placed at Rs 276 and continued to consolidate on volume front.
The scrip formed a solid bearish candlestick pattern on its weekly price chart after breaching below important level indicating a sustained pressure.
Further, the secondary momentum indicator continued to indicate negative signal with RSI slipping below last week’s zone coupled with the bearish outlook from MACD trend.
The scrip is facing a resistance at 296 levels and immediate support from 100-days EMA at Rs 210 levels. We have a SELL recommendation for Rain Industries which is currently trading at Rs 222.70
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